Panel discussion on “GREXITING the economic crisis”

On March 6, 2013, a panel discussion on the Greek economic crisis took place at the London School of Economics. This was part of a broader set of events taking place during the week of March 4-8, as part of the 1st Hellenic Forum, organized by the LSE Hellenic Society. The speakers were Nikos Christodoulakis, professor of economics at the Athens University of Economics and Business, and former Deputy Minister of Finance; Paschos Mandravelis, columnist on economics, politics and society at Kathimerini; Elias Papaioannou, associate professor of economics at the London Business School; and Dimitri Vayanos, professor of finance at the London School of Economics. The latter two panelists are contributors to this blog. Christodoulakis argued that Greece’s stabilization programme caused an unnecessarily large decline in GDP and increase in unemployment. Mandravelis argued that while society expects the government to devise strategic plans for economic growth, growth will come if the government simply grants more freedom to the private sector by abolishing cumbersome regulations and bureaucracy. Papaioannou argued that even when growth resumes it is likely to be anaemic, with a high unemployment rate. Moreover the on-going social disintegration and political polarization could lead to the abandonment of any modernization effort of Greek economy and society. Vayanos argued that while Greece’s world ranking in terms of GDP remains high, that in terms of institutional quality is much lower, so GDP will continue its decline unless institutions improve. He sketched a number of necessary reforms, and discussed the political economy of reforms and why they are slow to happen.

The presentation of Elias Papaioannou is available here, and that of Dimitri Vayanos is available here. An article summarizing the discussion on SKAI news is available here.